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Case Summary 3

The case concerned a dispute over a savings deposit contract where a customer lost money after attempting to withdraw cash from a fraudulent ATM notice. While the court found the customer partially at fault, it also ruled the bank was required to ensure secure banking channels and compensate 30% of the loss since it failed to maintain the ATM where the notice was posted.

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15 views

Case Summary 3

The case concerned a dispute over a savings deposit contract where a customer lost money after attempting to withdraw cash from a fraudulent ATM notice. While the court found the customer partially at fault, it also ruled the bank was required to ensure secure banking channels and compensate 30% of the loss since it failed to maintain the ATM where the notice was posted.

Uploaded by

cathyyu63
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Huang v Industrial and Commercial Bank of China Laibin Southwest Branch

(hereafter “ICBC branch”)

Summary of the Facts and Judgments

The case concerned a dispute over saving deposit contract, particularly, the bank
should bear responsibility to what degree when depositor suffered loss partially due to
the inadequate maintainence of bank facility. After no cash came out from the ATM
outside the defendant ICBC branch when attemped to withdraw cash, the plaintiff,
Huang, was deceived when he dialed the fradulent hotline posted on that ATM
(purported to be from an official notice issued by ICBC) and subsequently his account
balance (approximately RMB45,000) was being transferred to a third party’s account
with ICBC. Huang also sought to claim for hiss loss when the ICBC branch refused to
hold the subject fund in the suspected fraudster’s account due to the lack of legal
documentation knowing that Huang was a victim of fraud.

When the case was tried at the first instance, the court acknowledged the existence of
a valid savings deposit contract, legally binding on the parties, Huang and the
defendant ICBC branch. It also found that as a financial institution, the defendant
branch was required to bear the loss of Huang due to its failure to perform
contractual incidental obligation, namely in offering secured banking channels to
its customers, including the ATMs located within the vicinity of the branch. However,
ICBC has no right to arbitrarily freeze depositors’ balance without legal ground.
In summary, Huang shared part of the fault as he suffered loss following the
fraudulent instruction. The court held that in accordance with the Chinese Contract
Law Article 60, the defendant ICBC branch should compensate 30 percent of Hung’s
loss (ie. RMB45,000 × 30%), while dismissing Huang’s other claim.

The defendant filed an appeal to the intermediate people's court, argued that there
was an “error of law applied” in the first ruling. In addition, the bank should be
relieved of any fault as in this case, the loss was solely owed to Huang’s fault and the
wrong done by a third party, instead of by the negligence or any flaw in its security.

However, the ground of appeal was not established by the appeallant court. Firstly, it
is confirmed that the law was correctly applied in the judgment. Moreover, the
defendant branch was negligent in security oversight as it failed to notice the
scammed notice posted on its ATM. As a result, the original verdict was upheld and
was correct to impose an appropriate portion of liability onto the defendant branch.

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